Head to Head Comparison: Calpine Corporation (CPN) versus OGE Energy Corporation (OGE)

OGE Energy Corporation (NYSE: OGE) and Calpine Corporation (NYSE:CPN) are both mid-cap utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Valuation and Earnings

This table compares OGE Energy Corporation and Calpine Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
OGE Energy Corporation $2.26 billion 3.09 $338.20 million $1.91 18.33
Calpine Corporation $6.72 billion 0.80 $92.00 million ($0.07) -214.11

OGE Energy Corporation has higher revenue, but lower earnings than Calpine Corporation. Calpine Corporation is trading at a lower price-to-earnings ratio than OGE Energy Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

OGE Energy Corporation pays an annual dividend of $1.33 per share and has a dividend yield of 3.8%. Calpine Corporation does not pay a dividend. OGE Energy Corporation pays out 69.6% of its earnings in the form of a dividend. OGE Energy Corporation has increased its dividend for 10 consecutive years.

Volatility & Risk

OGE Energy Corporation has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Calpine Corporation has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for OGE Energy Corporation and Calpine Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OGE Energy Corporation 1 5 1 0 2.00
Calpine Corporation 0 7 3 0 2.30

OGE Energy Corporation currently has a consensus target price of $36.67, indicating a potential upside of 4.73%. Calpine Corporation has a consensus target price of $14.84, indicating a potential downside of 0.98%. Given OGE Energy Corporation’s higher probable upside, equities analysts clearly believe OGE Energy Corporation is more favorable than Calpine Corporation.

Insider and Institutional Ownership

62.5% of OGE Energy Corporation shares are held by institutional investors. Comparatively, 97.9% of Calpine Corporation shares are held by institutional investors. 0.5% of OGE Energy Corporation shares are held by company insiders. Comparatively, 1.2% of Calpine Corporation shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares OGE Energy Corporation and Calpine Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OGE Energy Corporation 16.69% 10.92% 3.73%
Calpine Corporation -0.27% -7.68% -1.38%

Summary

OGE Energy Corporation beats Calpine Corporation on 9 of the 16 factors compared between the two stocks.

OGE Energy Corporation Company Profile

OGE Energy Corp. (OGE Energy) is an energy and energy services provider offering physical delivery and related services for both electricity and natural gas primarily in the south central United States. The Company operates through two segments: electric utility and natural gas midstream operations. The electric utility segment generates, transmits, distributes and sells electric energy in Oklahoma and western Arkansas. Its operations are conducted through Oklahoma Gas and Electric Company (OG&E). OG&E is an electric utility in Oklahoma and its franchised service territory includes Fort Smith, Arkansas and the surrounding communities. The natural gas midstream operations segment represents the Company’s investment in Enable Midstream Partners, LP (Enable) through subsidiaries, and ultimately OGE Enogex Holdings LLC (OGE Holdings). Enable’s assets and operations are organized into two segments: gathering and processing, and transportation and storage.

Calpine Corporation Company Profile

Calpine Corporation is a power generation company. The Company is engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. The Company’s segments include West (including geothermal), Texas and East (including Canada). In the Northeast and Mid-Atlantic regions, the Company has generating units capable of burning either natural gas or fuel oil. As of December 31, 2016, the Company’s portfolio consisted of two types of power generation technologies, including natural gas-fired combustion turbines, such as combined-cycle plants, and renewable geothermal conventional steam turbines. As of December 31, 2016, the Company’s portfolio included 80 power plants, including one under construction, with an aggregate generation capacity of 25,908 Megawatt (MW) and 828 MW under construction. As of December 31, 2016, it had four MW of capacity from solar power generation technology at its Vineland Solar Energy Center in New Jersey.

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